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Governor Rick Snyder says he may want to bank the money from an unexpected improvement in tax collections – if the windfall exists.

Early revenue projections suggest Michigan may collect $500 million more than anticipated.

But Governor Snyder says he’s not ready to count that money as part of his budget plans.

He says the state may be better off putting it into savings.

“I’m bullish that we’re on a positive economic path, but to say we’re going to see just an upward curve without a few bumps, I would be careful about speculating that given the challenge of gasoline prices and such.”

Democrats want to use any windfall to scale back proposed cuts to schools. The next official revenue estimate comes in mid-May.

The House and Senate are continuing to work this week on budget proposals with an eye toward finishing before June first.

screen grab from TV commercial

People and businesses that owe back taxes to the state of Michigan have until June 30th to pay up without paying fines and penalties.

There are potentially hundreds of thousands of people and businesses that owe the state unpaid taxes.

The state hopes to net $90 million dollars from the tax amnesty program. 

State Treasurer Andy Dillon says if you owe, now is a good time to pay:

"It doesn’t matter why you didn't pay your taxes – the penalties can be forgiven. And the penalties can be quite stiff. It depends on the tax that you’re talking about, but it can be as much as 25% of the liability that can be forgiven, and the sooner you pay it off, the sooner you stop paying interest on that obligation."

This is the third time since the 1980s the state’s offered amnesty to people and businesses with unpaid back taxes.

The program requires payment of all back taxes plus interest.

The amnesty program was approved by the Legislature last year to find some new revenue to help balance the budget.

The Michigan Tax Amnesty website declares "all excuses welcome."

Here's the program's TV spot:

Governor Rick Snyder offered some hints as to what his soon-to-be unveiled education reform plan will look like.

The governor addressed an education conference in East Lansing today.

Governor Snyder says student test scores are both “startling and scary,” and that Michigan is falling behind the country and the world in preparing young people for life after school:

“We need to do better and that’s something we need to focus on and we will,” said Snyder.

The governor says he wants to relax school regulations s to give teachers and principals more freedom and responsibility over educational decisions. And then he says the state will measure what happens:

“We need to put much more focus on proficiency, on growth, on measurements and results than we have had in the past," he said. "It’s about really delivering results for these kids. The whole system has to be geared to say, 'how do we make sure each and every child in our system gets a good year’s education each and every year?' Think about all the great talent, all the great resources that we have in our system, yet we’re not achieving the results that we have to achieve."

The governor also says he wants to do more to keep gifted teachers in classrooms instead of promoting them into administrative positions.

The governor says he envisions an education system that starts with pre-school and continues past college.

The governor will roll out his education reform agenda on Wednesday in Detroit.

Sarah Hulett / Michigan Radio

It appears Michigan may be in for a revenue windfall of about $500 million dollars more than  it was expected to take  in this year.

The state Senate Democratic leader says Governor Rick Snyder and the Legislature should use that money to avert cuts to schools.

The state Senate Democratic leader is calling for protections in the Michigan Constitution against using the School Aid Fund for any purpose other than K-through-12 education.

Senate Minority Leader Gretchen Whitmer says she’s looking for any way she can to avert school aid cuts as high as $470 per student.

Nissim Benvenisty / wikimedia commons

Governor Rick Snyder says he is opposed to provisions in Republican budget plans that would restrict how money is spent on embryonic stem cell research at public universities.

Republican lawmakers are renewing efforts to enact additional rules surrounding the voter-approved amendment that allows public funds to be used for the research.

Voters approved the amendment to the state constitution in 2008.

Since then, Democrats have blocked efforts by opponents of embryonic stem cell research to demand reports or enact additional restrictions on  it, but now Republicans are in charge in the Legislature.

Governor Snyder is a Republican who supports the voter-approved amendment and stem cell research.

The governor says he wishes Republican lawmakers would leave stem cell research out of the debates on university spending:

"I think we need to focus on higher education, not stem cells. We passed a constitutional amendment on that topic some time ago and we need to follow through on what our voters said."

The governor has the authority to veto budget line items.

The governor and the Legislature are continuing to negotiate on the budget with the goal of having it wrapped up by June first.

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A story by Michigan Radio’s Rina Miller about foster care expenditures went viral over the weekend, thanks to a post on Gawker. Gawker, it seems, caught wind of the story after the Michigan Messenger posted it.

The story deals with money that the state allocates to families to buy clothes for foster children.  

State Senator Bruce Caswell wanted to require foster families to purchase clothes at thrift stores like the Salvation Army and Goodwill.

From the original article:

Foster children in Michigan would use their state-funded clothing allowance only in thrift stores under a plan suggested by State Senator Bruce Caswell.

Caswell says he wants to make sure that state money set aside to buy clothes for foster children and kids of the working poor  is actually used for that purpose.

He says they should get "gift cards" to be used only at Salvation Army, Goodwill or other thrift stores.

"I never had anything new," Caswell says. "I got all the hand-me-downs. And my dad, he did a lot of shopping at the Salvation Army, and his comment was -- and quite frankly it's true -- once you're out of the store and you walk down the street, nobody knows where you bought your clothes."

The story originally aired on Friday, April 15. Since that time, we have received more than 270 comments - most people expressing their outrage over Caswell's proposal.

We received this comment from Sonja S. who says she was in foster care from ages 11-17:

Unfortunately, by demanding the money be spent in thrift stores, Mr. Caswell is doing emotional harm to the children. It doesn't matter what his motives are, the fact is that they're ill thought-out.

Senator Caswell said he received a lot calls after the story aired from people asking him to change his proposal.

Ifmuth / Flickr

From the Associated Press:

Commissioners in Bay City are bracing for another year in the red heading toward Monday's presentation of the proposed 2011-12 city budget. The Bay City Times reports a deficit similar to the $1.6 million faced this year is expected due to anticipated cuts in state funding.

The budget year begins July 1. Commission President Kathleen Newsham warns that the news is "going to be bad." City Manager Robert Belleman says no municipal layoffs are expected in the proposed budget and that money from a reserve fund will be used to cover a deficit.

Bay City registered $1.4 million in savings last year. Belleman says the city's revenue sharing from the state is down by at least a third.

Michigan House Republicans

(This story originally aired on Marketplace)

Across the country, states are weighing competing funding priorities as they work to close gaping budget deficits.

In Michigan, Republican Governor Rick Snyder isn’t just trying to erase $1.4 billion in red ink. He also wants to fundamentally remake the state’s tax code. Snyder says it’ll help reverse years of economic decline.

Re-writing the tax code

Today's tweet from the Governor... "Let's focus on doing the right things to get our fiscal house in order and create an environment where jobs can grow."

For a state with $1.5 billion budget deficit and leaders who want to ease taxes on businesses - that means cuts.

The Appropriations Committee has voted on some cuts in education today.

From the Associated Press:

A Michigan Senate committee has voted to cut state aid to school districts by an additional $170 per student for the fiscal year starting Oct. 1.

The Republican-led Senate Appropriations Committee approved the cut along party lines Thursday. The reduction would be in addition to a $170 per student cut already on the books for the current fiscal year that would be continued into next year. That makes the total reduction $340 per student.

The proposal advances to the Senate floor. The cuts recommended by the Senate panel aren't as deep as the additional $300 per student cut recommended by Republican Gov. Rick Snyder, which would make the total cut $470 per student.

Most state departments will be cut next fiscal year as Michigan continues to struggle with budget problems.

The state's new fiscal year starts on October 1st. The State Legislature and Governor Rick Snyder are hoping to finalize the budget by June 1st.

Do teachers' beliefs on climate change affect their students? Yes and no.
Flickr user Frank Juarez / http://j.mp/1SPGCl0

A state Senate budget subcommittee has rolled back the size of Governor Rick Snyder’s proposed cut to K-through-12 schools.

The Senate subcommittee recommendation would still cut school funding by $170 per student, but that’s less than the $300 per student cut called for by the governor in his budget proposal.

State schools superintendent Michael Flanagan says more money for K-through-12 education is always welcome, but Flanagan says he’s concerned about what might have to be cut to make up that money.

"I don’t want to see pre-natal care for moms go at the expense of a couple of bucks in the formula, so that we actually have a bigger problem than we would have had, and I hope that’s what we can start to get people to think about is the continuum of services for kids – not just the K-12 issue."

The full Senate Appropriations Committee is expected to vote on the budget recommendation tomorrow, along with budgets for universities, community colleges, and state agencies.

The governor has set a goal of wrapping up the entire state budget by June first.

screen grab of YouTube video

In an attempt to reach people who are hanging out online, President Obama is holding an "online town hall" meeting at the headquarters of Facebook in Palo Alto, California. There he'll discuss his ideas for bringing down the deficit, and take questions posted on the White House Facebook page.

Here's the invite from the President released this morning:

Carla Marinucci on the Politics Blog of the San Francisco Chronicle writes:

...only a few lucky invitees and reporters will actually be allowed inside the headquarters of Facebook to see the town hall...White House communications director Dan Pfeiffer told reporters last week in a conference call that Obama isn't necessarily aiming for the youth demographic with his event. "It is an attempt to reach people who may not get their news through traditional news sources like newspapers and the network news,'' he said. "And we want to go to where people...congregate online and communicate with them there. And Facebook is certainly one of the premiere places to do that."

More than 300 local officials and prospective emergency managers are in Lansing today and tomorrow to be trained in the state's new fiscal crisis law.

The law gives sweeping authority to emergency managers named to run school districts and local governments that can no longer pay their bills.

Terry Stanton of the Michigan Department of Treasury says the goal is for the state to intervene earlier to avoid the drastic step of a state takeover.

Steve Carmody / Michigan Radio

"We ain't cops anymore. We're librarians. We take reports. We don't fight crime."

That's what officer Steve Howe told New York Times reporter Charlie LeDuff.

LeDuff rode along with Howe and wrote about the experience in his Sunday Magazine article "Riding Along With the Cops in Murdertown, U.S.A."

The desperation in Flint is well known. After several years of cuts to vital city services, the city is still looking at a projected budget deficit of $17 million.

LeDuff writes that the sign on the door of Flint's Police Headquarters says it all "Closed weekends and holidays."

LeDuff writes that another sign in town is a lie. He's talking about the sign on an archway that names Flint "Vehicle City."

But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.

What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.

The murders in Flint continue to pile up. More than 20 so far this year.

Mayor Dayne Walling held a press conference recently saying "the killings and criminals must be stopped."

But who's going to stop them? LeDuff reports there are only six patrolmen working on a Saturday night in Flint and the city has laid off two-thirds of its police force in the last three years.

Michigan Radio's Steve Carmody reported that Flint's Public Safety Director Alvern Lock denied "that cuts to Flint’s police department have played a role in the increase in the city’s increase homicide rate."

But when reading LeDuff's piece, you have to wonder.

Proposed prison closing angers lawmaker

Apr 17, 2011
mich.gov

A Detroit lawmaker is angry over what he calls a unilateral decision to close the Mound Road Correctional Facility in the city.

Representative Fred Durhal is a member of the House Appropriations Corrections Subcommittee, but he says he was not consulted about closing the Mound prison.

Durhal says Rep. Joe Haveman told the committee only they would close a prison in the north, south, east and west parts of the state in a budget-cutting move.

"It caught me by total surprise," Durhal says. "I have not had an opportunity to look into just where those prisons would be, if those are the criteria that he is using. I think they should have had some discussion inside of the entire committee."

The Mound Road prison is one of the state's newer facilities. It houses about 1,000 prisoners and employs about 200 people.

Political Roundup

Apr 14, 2011

We’re getting a roundup of this week’s state politics with Susan Demas, Political Analyst for Michigan Information and Research Service, and Ken Sikkema, former Republican state Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants.

This week Governor Snyder and GOP leaders announced they had come up with a tax deal. Demas says the biggest part of the deal is that they modified the pension tax, which was controversial.

If you are on a pension right now, if you are 67 and older you are not going to have to worry anymore, they have taken that off the table. If you’re younger than 67 you will be taxed more than you would have previously. But that means that instead of the almost $1 billion that was suppose to raised it will only raise $300 million. So to make up the difference we will see more budget cuts. And the income tax will stay at the 4.35% rate. It will not drop down to 4.25%.

Soaking the Poor

Apr 14, 2011

President Obama came under fire yesterday for proposing that the richest Americans pay a higher proportion of the tax burden, especially with deficits soaring out of control.

Republicans, some of whom are running for president, said this would hurt the economy‘s ability to create jobs.

They said this was just one more wrong-headed left-wing proposal to solve economic problems by “soaking the rich.”

Well, that’s a battle that will be fought out on the national stage, likely throughout next year’s presidential campaign and beyond.

Matthileo / Flickr

A state House panel has voted to cut aid to the state's 15 public universities by about 15 percent. The Associated Press reports:

The Republican-led state House appropriations subcommittee dealing with higher education funding approved the plan by a party-line vote Wednesday. The measure next goes to the House Appropriations Committee.

The funding plan started by the House is similar to one proposed by Gov. Rick Snyder but it has a few differences.

The House plan calls for an across-the-board funding cut of 14 percent to each of the state's 15 public universities in the budget year starting Oct. 1. Another 1 percent would be weighted depending on how much state aid each university gets on a per-student basis.

Funding cuts could be higher if universities don't agree to certain tuition restraints.

It's been a busy couple days at the state Capitol as Governor Rick Snyder and Republican legislative leaders announced yesterday that they had agreed on a tentative tax deal. And, earlier today, a GOP-led Senate committee approved measures to require public employees in Michigan to pay at least 20 percent of their health insurance costs.

Governor Snyder has said he wants a completed state budget for the new fiscal year by May 31st. The state is currently facing a projected $1.5 billion deficit for the fiscal year that begins October 1st.

Thousands of teachers, public employees and their supporters are expected to protest at the state Capitol today.

Organizers say a rally scheduled for Wednesday could be the biggest yet for the state's current budget cycle, the Associated Press reports. From the AP:

Michigan AFL-CIO President Mark Gaffney says Republican Gov. Rick Snyder and lawmakers are moving ahead too quickly with budget plans.

Unions are upset about proposals they say would undermine collective bargaining rights. Other groups are upset about proposed cuts to education funding and other programs.

Snyder has said the protests are part of the democratic process.

Ifmuth / Flickr

Governor Rick Snyder and Republican leaders in the Legislature have struck a tentative bargain on tax reform and the state budget. The plan delays an October 1st income tax rollback and includes a compromise on taxing pensions.

Michigan is one of just a handful of states that does not tax pensions. The deal between Governor Snyder and GOP leaders would shield people 67 years old and older from a pension tax. The governor originally wanted to tax all pensions, but he says compromises were necessary. Governor Snyder:

“So it’s a transitional plan that I think addresses the shorter-term requirements while being structurally sound for the long term.”

The plan also calls for scrapping the complicated and unpopular Michigan Business Tax in favor of a corporate income tax. That’s part of an overall tax cut for most businesses to spur job creation.

The plan would eliminate the tax break for working poor families, but offer some new tax relief for low-income homeowners and renters.

The plan must still be approved by the House and the Senate.

Lester Graham / Michigan Radio

Governor Rick Snyder and Republican leadership in the State House and Senate appear to be close to a deal on the budget.

From the Associated Press:

Gov. Rick Snyder and Republican state lawmakers are reporting "significant progress" on proposals related to business and pension taxes for the fiscal year starting in October...

Two people with knowledge of the talks tell The Associated Press that the proposals include many elements of Snyder's original business tax plan. They spoke on the condition of anonymity because the deal hasn't been finalized.

The Republican governor wants to replace the state's main business tax with a 6 percent corporate tax applied to corporations with shareholders.

The plan would include taxes on pensions and other retiree income but it would be modified from Snyder's original proposal. The new proposal calls for phasing in or scaling back the tax.

Some lawmakers have been loathe to accept any taxes on pensions, but it appears a plan to phase in a pension tax may be more palatable.

Peter Luke of Booth Newspapers reports on some of the details of the agreement:

Under the phased-in alternative, the status quo would apply to those 67 and up, whose pensions would continue to be tax exempt.

A middle group of retirees 60 to 66 would be subject to a pension tax, but the first $20,000 of pension income for single filers -  $40,000 for joint filers - would be tax exempt.

Those younger than 60 would pay tax on all their pension income.

An AARP spokesman said they remain opposed to a tax on pensions, whether its phased in or not.

A public announcement of the agreement is expected to come this afternoon.

Some people got locked out of today's Detroit City Council meeting, where Detroit Mayor Dave Bing was laying out a 5-year budget plan that called for cutting employee pension and health care costs.

Council security told citizens and several reporters that they couldn't come in because the hearing room was "filled to capacity."

That escalated into a dispute between security guards and the people who demanded their right to enter under the state's Open Meetings Act.

Detroit resident and volunteer organizer Felicia Sanders wanted to hear Bing's presentation.

"If you get up and you're willing to attend a meeting to fight and speak out for your city, you should be allowed to participate in the meeting."

Sanders and others questioned why the City Council didn't hold the hearing in a much larger public auditorium just across the hall.

(courtesy City of Detroit)

Detroit’s mayor says the city’s unions will have to give big contract concessions or the city of Detroit may end up in the hands of a state appointed Emergency Financial Manager. Mayor Dave Bing outlined his budget plan to the city council this morning.

Bing says pension and health care costs threaten to force the city into insolvency.  

“If we are unable or unwilling to make these changes, an Emergency Financial Manager will be appointed by the state to make them for us.  It’s that simple.”  

The city is facing a $155 million budget deficit. The mayor says that could grow to over a billion dollars in five years, unless deep cuts are made now. 

Michigan’s new Emergency Financial Manager law gives the state appointed administrator broad powers to throw out union contracts and make budget decisions.

Detroit

Detroit Mayor David Bing is delivering his budget address to city council right now.

Bing says the budget he is presenting is a five year plan to eliminate the city's budget deficit.

He says the most important conversation the city has to have is with union employees about pensions and health care benefits.

By 2020, Bing says fringe benefits and pensions would consume half the city's general fund.

You can watch the speech here.

Matthileo / Flickr

Michigan lawmakers will be back at the state Capitol today after a two-week Spring break and it appears that their attention will turn to the state budget.

Budget-related subcommittees in both the House and Senate are scheduled to meet today.

The state faces a projected budget deficit of around $1.5 billion for the fiscal year that begins October 1st. Governor Rick Snyder says he wants lawmakers to finish the budget by May 31st.

Many lawmakers, however, say they don’t think the budget process will be finished before this summer.

Corvair Owner / Flickr

Detroit Mayor Dave Bing will present his budget for the city later this morning. The Associated Press reports the budget will propose a five-year plan to wipe out the city's $150 million budget deficit. From the AP:

Tuesday morning's presentation is the first step in the city's budget approval process heading into the new fiscal year that starts July 1.

It follows Gov. Rick Snyder's signature last month on a state law that gives more power to state-appointed financial managers, letting them toss out union contracts to help balance the books of distressed communities and struggling school districts.

Bing has fought often with city unions over concessions designed to cut into the deficit.

A union protest of Bing's proposed 2011-12 budget is planned Tuesday's afternoon outside the Coleman A. Young Municipal Center.

Congress readies for more budget battles

Apr 11, 2011

As both sides sort out who won and who lost in the deal to keep the government running, the next phase of budget wrangling ensues.

The current-year budget deal struck Friday night still needs full congressional approval this week.

President Obama will deliver a speech Wednesday on the budget and the long-range deficits.

And sometime during the week, the House is expected to approve a new budget plan for next year that includes big changes in Medicare and Medicaid.

And none of that is to mention the looming battle about raising the federal debt ceiling.

Andrew McFarlane / creative commons

Governor Rick Snyder’s proposal to get rid of the current film tax credit and replace it with a more modest grant program has met with a lot of resistance from the film community.

But now some film folks say they’re willing to compromise.

Since 2008, Michigan has offered up to a 42% tax credit for movies made here. That amounted to the state paying out  $60 million last year.

(courtesy of the Michigan governor's office)

Governor Rick Snyder says he is not sure how or if state government would be affected by a potential temporary shutdown of the federal government.

Leaders in Congress are still working with President Obama on a budget solution, with a deadline of this evening.  

Governor Snyder says information is still rolling into his office about the potential effects on the state.  

Less than 24 hours remain for President Obama and Congressional leaders to avert a government shutdown. A deal to fund the federal government through September must be reached by midnight tonight to keep the government fully operating. President Obama and legislative leaders met again last night to narrow their differences over how much to cut the federal budget but no agreement was made.

[We asked NPR's Linton Weeks to think about some things that might benefit from a federal government shutdown. Here's what he reported back.]

We have all heard dire predictions surrounding the possible closing down of the federal government.

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